Special report: Water intrusion can silently destroy houses

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Sunday, June 18, 2000

Special report: Water intrusion can silently destroy houses

Donna Halvorsen, Youso and Jim Buchta / Star Tribune

No one could tell that and Saunders' stately Woodbury home was

rotting away -- not even its owners -- until a cluster of mushrooms sprouted

from a wall in the master suite.

The couple faces an estimated $400,000 in repairs to replace mold-infested

walls in a house that cost $550,000 to build seven years ago.

The Saunders' home is a local example of a nationwide problem with moisture

destruction.

" We see [mushrooms] in numerous homes, " said Mike Happ, an investigator for

the state building codes and standards division.

The Saunders' home is a local example of a national problem: Moisture is

creeping into houses across the country, causing walls to rot and destroying

the house's basic structure.

" We're building self-composting houses, " said St. microbiologist

McGregor Pearce, who has tested the Saunders house and many others. The

houses that have been identified as having problems are merely " the tip of

the iceberg, " Pearce said.

Nobody has a good handle on the size of the problem, but it's big enough

that the federal government has launched studies to look at water problems

in new homes, including water that comes from the outside.

A critical change in the way houses are built came in response to the energy

crisis of the 1970s. Builders began constructing tighter houses to reduce

energy costs and make houses more comfortable. Meanwhile, new engineered

wood products, typically sheets of wood chips and glue, replaced traditional

wood boards for construction. Along the way, one of life's necessities --

water -- became a villain.

Three years ago, in a Star Tribune report, building experts expressed

concern that moisture generated inside tightly built, inadequately

ventilated houses could be trapped, rotting walls and causing health

problems. Now they point to a much bigger threat: water that comes into the

house from the outside.

Construction methods

Rainwater is a big culprit, leaking into walls around windows, doors, decks

and roofs.

Rain always has been a problem for houses, of course. But unlike walls in

older homes, walls built today are tighter and tend to hold moisture. Once

water gets inside, it meets new, water-sensitive construction materials.

That makes keeping water out more important than ever. But some proven

techniques for doing that are no longer used or are used improperly.

" Basically, we're trying to build with unskilled labor, and we've probably

lost the connection to the old guys who knew how to keep water out of a

building, " said Bill Rose, research architect at the Building Research

Council at the University of Illinois. " I think we're getting a wakeup call

to how important it is. "

While no single solution has emerged, building experts say there are

techniques that builders can use to direct water out of and away from the

house, preventing it from getting into the walls.

Moisture is particularly harmful in homes built or remodeled in the past 20

years. A home's price, location or type of siding doesn't exempt it from

damage.

Barry Eliason, owner of Stucco Pro, a St. company that tests for water

problems in stucco houses, said he hasn't seen " a single home that is less

than 20 years old that doesn't have a significant area of moisture

intrusion. "

By the time a homeowner discovers the hidden damage, repairs can cost half

the appraised value of the house.

In many cases the damage is not covered by homeowners' insurance policies

and can surface after warranties have expired, leaving the homeowner to pay

the bill or sell the house to an unsuspecting buyer. Damage inside walls is

not likely to be detected by a private home inspector; they do visual

inspections and can probe into walls only with the owner's permission.

Federal response

As homeowners look for answers, the federal government is beginning to look

at the issue.

The Forest Products Laboratory in the U.S. Department of Agriculture has

been studying water problems in houses for two years, but it may be two more

years before conclusions are reached, said project director Anton TenWolde,

a research physicist. " I would say 90 percent of the moisture problems " in

houses are related to moisture coming in from the outside, he said.

The U.S. Department of Housing and Urban Development is funding research by

the National Association of Home Builders into moisture damage and housing

durability in one-and two-year-old houses. Project engineer Bill Freeborne

said the agency is concerned that it could be stuck with damaged houses if

homeowners default on their mortgages.

That concern became a reality in Vancouver, British Columbia. In the 1990s,

some homeowners walked away from their mortgages, leaving lenders with

leaking and rotting houses.

The provincial government offered no-interest loans to repair homes,

required builders to provide five-year warranties against water intrusion

and created a Homeowner Protection Office.

Who's to blame?

In Minnesota, two builders associations acknowledge that some houses have

water intrusion damage and say it's a problem they're looking at.

In a prepared statement, the Builders Association of Minnesota and its

affiliate, the Builders Association of the Twin Cities, said the number of

affected houses is low compared with the number of homes built, and each

house must be examined individually to determine the cause of the problem.

Houses are affected by many variables, including the weather, homeowner

maintenance, and, on occasion, defective building materials or incorrect

techniques, they said.

" Our industry is aware of some water-intrusion cases that focus on stucco

application, particularly in the window area. These problems may be the

result of tightening homes as required by the state code, combined with use

of new materials like OSB [oriented-strand board], " they said.

Further, the associations said, a lot of different groups share

responsibility for how well homes are built. Government agencies develop

codes that give builders standards to follow; builders construct houses to

meet the requirements and also provide warranties for those houses; city

inspectors inspect houses to make sure they meet code requirements; and

consumers must maintain their homes to avoid problems. " Each link is

critical, and each may have some culpability when a problem arises, " the

associations said.

They also said builders' liability insurance policies should cover most of

the waterdamage in houses.

The issue is not new to Minnesota building code officials. They started

getting sporadic reports of leaking, rotting homes from municipal inspectors

more than two years ago. By this spring, the state had received about a

hundred reports of water-damaged houses. Most are stucco houses -- experts

aren't sure why -- but increasingly reports involve other kinds of siding.

and Saunders look through scrapbooks chronicling their house

problem, including pictures of the mushrooms that sprouted out of the wall

in their master suite.

Steve Hernick, a state building code administrator, said the state is

working with University of Minnesota researchers to gather information and

study data on stucco houses from other states before deciding what, if

anything, should be done here. " I don't think we're going to cry wolf and

say there's a huge problem until we know that for sure, " Hernick said.

The state is not soliciting reports of leaking houses, and no state agency

considers it the agency's job to inform homeowners of the problem.

Woodbury, a rapidly growing suburb, has altered inspection requirements for

stucco homes and posted information about water problems on its Web site

(http://www.ci.woodbury.mn.us ).

" We think we're getting [houses] built according to code in Woodbury, " said

city building official Ron Glubka. " Is that going to work? I just don't

know. "

Tearing out walls

The mushrooms in the Saunders house tipped them off to potential problems in

their walls. They hired a contractor who cut holes in the walls and found

mold, rot and deteriorating wood.

The Saunders then went looking for help. The builder, Rick Tosten, owner of

Reliable Homes in Woodbury, said he wasn't at fault. In a recent interview

Tosten said waterdamage in houses is a major problem, and he has changed his

building practices to reflect what he has learned about it. He said the

Saunders home was built " in an era when nobody knew that we were going to

develop these [water] problems. "

Tosten said he is helping his customers with problems in their houses but

they will have to pay for waterdamage that is due to their lack of

maintenance.

Home builder Rick Tosten, at a house that was under construction in Woodbury

in April, demonstrates techniques that he believes will reduce or eliminate

water intrusion problems in houses.

Saunders' homeowner's insurance company wouldn't pay for repairs. A local

building inspector sent him to Happ, in the state's building codes and

standards division.

Happ found five code violations, which Saunders said he believes are

responsible for the water problems in his house.

The state considers any house with water intrusion problems to be in

violation of the code. But Saunders learned that he can't hold Woodbury

accountable for the damage, because building inspectors and the city can't

be sued for failing to detect code violations.

A city can require a builder to fix problems while the house is being built,

but once the city issues a certificate of occupancy the code violations are

the homeowner's problem, said Woodbury's Glubka.

The Saunders filed a lawsuit against Reliable Homes, and a trial is

scheduled for December.

" All I want is to be treated fairly and get my house back in order, "

Saunders said. " What I paid for is what I want. "

Awash in repair bills

Alan Pearson, left, watches as contractor Ken Streiff pulls pieces of rotted

wood off a wall at the Markley Square Condominiums at 36th St. and 4th Av.

S. in Minneapolis.

Sometimes the first hint of leaky walls is flaking paint.

That's what started to happen a few years after the construction of Markley

Square Condominiums, a 15-year-old, 40-unit townhouse complex in south

Minneapolis.

" When we'd paint at the end of the summer, paint on entire sections of the

walls would be blown off -- it would begin to flake and chip immediately, "

said Tony Didier, chairman of the homeowners association's maintenance

committee.

Then the wood siding began warping. Water stains surfaced on interior walls.

Exterior walls became discolored. Wall studs were so rotted that Jeff

Garetz, the construction manager hired last year to repair the damage, could

poke his finger through them.

By that time, the complex's warranties had expired and the homeowners were

left with a repair bill of almost $500,000, which also included fixing some

drainage problems.

Didier and Garetz said most of the problems were caused by improper flashing

(the use of water-shedding materials and techniques), inadequate priming and

painting of siding boards and failure to install building paper in some

places. Building paper is a water-resistant material that goes under the

siding and helps keep the house's sheathing dry.

Unbeknown to the condominium owners, rain from the roofs splashed against

the walls, sneaking behind wood siding and into the wall cavity, where it

rotted the wood sheathing and studs.

" Most of our problems were caused by sloppy work, and [there were] some

pretty serious design and installation problems, too, " Didier said.

Dale Forsberg, president of -Forsberg Co., St. Louis Park, which built

the townhouses, said the complex was constructed according to

specifications. " The project was inspected as it was being built, and it was

being done properly, " he said.

The homeowners association sued, but the case was dismissed because the

10-year statute of limitations governing " major structural damage " had

expired.

Because the association didn't have the money to make the repairs, Didier

appealed to the city and neighborhood organizations, which provided $210,000

to cover some repair costs. The homeowners' association paid the rest.

City Council Member Herron, who helped find subsidies, said consumer

protection laws need to be strengthened. " I've learned from owning my own

home that some things don't crop up until later . . . Problems like water

seepage could go on for years before you realize what has happened. "

'House of horrors'

Eden Prairie homeowner Mike Haase pulls back carpet to show where water

leaked in and rotted the floor.

Because damage can be easily hidden or take years to appear, homebuyers are

at risk of purchasing hidden water problems that sellers may or may not know

about.

In February, for instance, Arneson's family fell in love with a

four-year-old stucco home in Minnetonka. It looked perfect, but inspector

Eliason asked to drill a couple of small holes into the walls to check for

moisture. The owners wouldn't allow it.

But Eliason pulled away insulation in an unfinished area of the basement and

found the wood above it saturated. He suspected the entire wall was soaked.

Arneson backed out of the deal. It was very emotional, Arneson said, but, " I

told my wife, it's just not worth the headache. "

Jan and Mike Haase of Eden Prairie weren't as lucky. In 1997 they thought

they'd found the ideal home in a 19-year-old house overlooking Olympic Hills

Golf Course. But it soon became " a house of horrors, " Mike Haase said.

The Haases' inspector found no major damage before the purchase. But two

months after the family moved into the house, bulges and cracks began to

appear in interior walls. They found a painter's card attached to a paint

can in the basement and called him.

In a deposition, the painter said he'd been there nearly 20 times to paint

the walls and repair recurring damage. He said he warned the sellers that

the house had serious problems that he wasn't qualified to fix. But he said

they told him to " just make it look good. "

Experts hired by the Haases said the front wall was so rotted that the roof

was unstable and could collapse. " It's a gorgeous house, but the builder

screwed up big time in the construction of it, " said Tom Lauhon, a home

inspector from Kansas who was hired to inspect the house twice.

Lauhon said that the vast majority of problem houses he sees are less than

10 years old and have problems with water coming in from outside.

What's the common denominator? " Not following installation instructions, " he

said. Lauhon said that flashings, sealants, siding and windows need to be

installed according to manufacturer's specifications, or they can leak and

the manufacturer's warranty will be voided.

In the Haase house, much of the damage was caused by water that seeped into

the house around poorly installed doors and windows and through a gap behind

a brick wall. " It was doomed by design, " Lauhon said. The company that built

the house is no longer in business.

The Haases bought the house from its second owner for $307,000. It has since

lost more than half its value, said appraiser Craig Harrington.

The couple thought the painter's statements would be their smoking gun in

any court case. But at the time of purchase they signed an agreement that

obligated them to resolve disputes through binding arbitration. " That was

our first and biggest mistake, " Jan Haase said.

An arbitration panel found that the previous owners had misrepresented the

house because they knew of the water problems and failed to disclose them.

But the Haases were awarded only $20,000 from the seller and $10,000 from

the real estate agency -- less than the $40,000 it cost to make their case

and a fraction of the $200,000 it would cost to repair the house. They

cannot appeal the decision or sue.

" I went to bed and stayed there for almost a week, " Jan Haase said. " It took

me a long time to get to the point of accepting the decision. "

The Haases have resolved to dip into their children's education fund to

repair the house. " My kids are going to suffer, and it's no fault of

theirs, " Jan said.

New vs. old

The Haase house was built just as dramatic changes were being made in the

way homes are constructed. Instead of drafty, energy-wasting walls, today's

walls are tighter, making homes more comfortable and energy efficient. But

they're also more likely to trap moisture and cause the structure to rot.

Sheets of engineered wood products -- typically wood chips and glue -- are

now used to construct walls. They're strong, and they make use of remaining

forest resources to meet construction demands, but they disintegrate if they

get wet repeatedly.

Many such building materials were introduced in the past 20 years. They have

little or no track record for how well they work individually, much less

with the other components in a house, said Pat Huelman, a University of

Minnesota building specialist who trains builders.

He and building scientists across the country bemoaned the lack of research

and development in the construction industry. They said there is little

scientific research on building materials and practices, making every house

an experiment.

The two Minnesota builders' associations say home construction has become

" incredibly more complex in the past few decades " with new codes,

technologies and materials, and the industry " does not have the luxury of

first building structures and testing them " under conditions that a home

will actually face.

However, the state association's nonprofit Building Industry Foundation is

setting up a technical advisory committee to identify areas, such as water

intrusion, in which research is needed.

Many experts say windows are a focal point for looking at water intrusion.

No one was concerned about water leaking into walls 30 years ago, said Tom

Sinning of Marvin Windows, because walls breathed and dried quickly. Minor

omissions in flashing that resulted in some water leakage would not harm the

house. But today, it can.

Al Mazig of Win-Dor Tech Inc., a Minneapolis firm that tests window and door

installations, said poor window installation is the cause of waterdamage in

many homes he's inspected. " Flashing isn't applied properly, " he said.

Statute of limitations

and Sue Oreck's home illustrates what can happen when flashing isn't

properly installed around windows.

The Orecks noticed high humidity and water leaking into two windows in their

new Minnetonka house the day after they moved in five years ago. The builder

came out repeatedly, painting and caulking around the windows and trying to

find the problem, Oreck said.

By the time the Orecks filed suit in Hennepin County District Court, it was

too late. A judge dismissed the case, saying the Orecks hadn't filed it

within two years of discovering their problem, as required by law. In

addition, the court found that Harvey Homes never promised to fix the

problems.

The Orecks appealed. The Minnesota Court of Appeals upheld the lower court's

ruling and the Minnesota Supreme Court refused to hear the case.

The Orecks had to pay $72,500 worth of repair bills and legal fees.

Dick Diamond, the Orecks' attorney, said he had hoped the courts would use

the Oreck case to address the two-year statute of limitations on home

construction. It doesn't make sense that there's a six-year statute of

limitations on defective products such as doors, but only a two-year statute

for the house in which they're installed, he said.

The Orecks also lost for another reason. Mark Covin, lawyer for the builder,

said Harvey Homes operates as a construction manager, not as a general

contractor, and any problems in the Oreck house were the fault of

subcontractors over whom Harvey Homes had no control. The Orecks said Harvey

Homes suggested the contractors.

Pat Greene, president of Harvey Homes, said she has been in the construction

business for 25 years and has had few problems. She said she knows there is

a water leakage problem in some houses. " There's a lot of theories, " she

said. " I think that they're still in the theory stage. You have to look to

the experts and do what you think makes sense. Nobody wants problems. "

While waiting for a legal resolution, the Orecks figured out their water

problem with the help of experts. They hired people to tear down the walls,

cut back the stucco around the windows outside, flash the windows, replace

the insulation and reassemble the walls.

They said they had depended on the building code and Minnetonka inspectors

to make sure their house was built right.

" I guess I thought you guys would be our watchdog, " Sue Oreck told two

Minnetonka officials who came to her house recently.

But Ron Rankin, the city's community development director, told her the code

is a minimum standard. " It doesn't mean the contractor's done a good job, "

he said.

The state and Twin Cities builders associations said the building code is

based on theories not tested in the field and is interpreted differently

from city to city.

The code is also vague in some places. " It says you should keep the water

out, " said Hernick of the building codes division. " It doesn't tell you how

to do that. "

Financial liability

The Orecks also faced another barrier that keeps homeowners from getting

help: Their homeowners' insurance didn't cover this kind of waterdamage.

Debra Johannson, State Farm section manager, said rot, mold and mildew " are

considered to be maintenance problems, things that haven't been dealt with

immediately by the consumer. "

Consumers often can't count on home warranties, either. Under state law,

builders' liability is one year for materials and workmanship, two years for

electrical, plumbing and other systems and 10 years for structural defects.

However, rotting wood supports have not been considered " major structural

defects, " said Edina lawyer Todd Iliff.

For a homeowner to be compensated under the 10-year warranty, " basically

your house has to be falling down, " he said.

Filing a lawsuit often is a homeowner's only option. It's not a cheap

choice: Lawyers who represent homeowners in court cases say it costs

homeowners $10,000 to $30,000 to take their builders to court.

Jim Mc, president of Mc Homes in Inver Grove Heights, said he

believes builders should stand behind their houses, but it wouldn't take

many bad houses to put a small builder out of business.

He said his company is systematically going through a list of his houses and

fixing problems that are found. " Our clients are delighted that we're taking

care of the problem, " Mc said. " They're not crazy about advertising

this problem for us, because it is literally a threat to us as a business to

stay in business. We're not going to be able to help any clients if we go

bankrupt because of this. "

Finding solutions

There is no agreement among experts about what causes the waterdamage, how

to repair it or how to prevent it from happening again.

When a problem is discovered, it causes major upheaval and stress. The

family has to move out, store its furniture, remove gypsum wallboard and

insulation, replace it and then check for corrosion of the electrical

system, the state's Happ said. The walls are torn down and reconstructed

outside and inside. Sometimes the whole house has to be jacked up to replace

rotting wood at the foundation.

Building scientists in the United States and Canada claim there's a simple

solution for the problem that seems to perplex so many people. It's called a

drainage plane, and flashing is an important component.

Joe Lstiburek, a Massachusetts forensic engineer, said builders should pay

attention to work being done in the four-year-old Building America program,

funded by the U.S. Department of Energy.

" We're doing a lot of rain control work, " he said. " We've figured a lot of

things out. "

Lstiburek, a consultant to the program, said every kind of siding and nearly

every window will leak, so every house needs ways to deflect the water. That

can be as simple as reviving once-common techniques for installing building

paper under the siding.

Pierre Gallant, a building engineer from British Columbia, agrees.

" We need to go back to basic construction practices, " he said, citing money

as the reason that builders have departed from those practices. " We always

try to do more with less, " he said. " To come up with more affordable

housing, we went too far. "

Rochester builder Jay Burke has similar concerns. " We're building houses

that if they last 50 years, I'll be surprised, " he said. " They're going to

virtually rot themselves to death. "

Lstiburek said adding drainage planes can cost as little as $500 per house.

He said he has been advocating drainage planes for 10 years, but the idea

has not caught on because it's not required by the building code and

builders nationally have lobbied against adding it.

That lapse can be costly for homeowners.

Steve Klossner, a house diagnostician from Lakeland Shores, Minn., said the

estimated cost to repair two houses he has diagnosed in Savage and Woodbury

is about $200,000 each. " I don't know of any consumer I've dealt with who

has the wherewithal to fix the problem, " he said.

Pearce, the microbiologist, said people who are building or buying houses

think they're buying durable, lasting homes. But, he said, " If we look at

the generations of homes that have been built in Minnesota, we have to

wonder how durable this post-1980 generation of homes is going to be. "

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